I don’t really have a specific formula for you. Just keep in mind that a liquidation can potentially overstate net income : A company would report the inventory with sales at current price but the COGS would be at historical cost that can be a lot lower than current. Financial statements would therefore report higher profitability (since lower cogs and higher net income) and lower cash flows (since higher net income means more taxes paid). An analyst would typically find information on the amount of a liquidation in the footnotes.
Adjust for LIFO liquidation by adding the phantom profits to COGS.
COGS is understated when LIFO inventory is liquidated so you must record an upward adjustment as an analyst. Check out the example in the CFAI book
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